April 27, 2011

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A man failed to convince the Indiana Court of Appeals that a change in the Wage Payment Statute that occurred during his employment should not be applied retroactively.

Raymond Brown worked for Bucher and Christian Consulting, Inc., d/b/a/ BCforward from December 2013 to March 2016. In addition to an annual salary of $36,000, he was also eligible to receive commissions on his sales.

After he quit, Brown filed a class action, arguing BCforward employees were not paid their salary-based wages in the timeframe as mandated by the Ten-Day Rule in Section 1 of Indiana’s Wage Payment Statute (Indiana Code section 22-2-5-1). He asserted that the company’s bimonthly pay schedule caused some paychecks to be issued outside of the Ten-Day Rule.

However, the Marion Superior Court ruled that Brown received all the wages he was owed and, therefore, he was not entitled to seek damages as allowed under the amended Section 2. In 2015, the Indiana General Assembly altered the section so that employers would be liable for unpaid wages, attorney fees and court costs. But liquidated damages were additionally available only if the employer did not act in good faith.

Brown maintained the statute could not be applied retroactively because doing so would violate a vested right or constitutional guarantee.

“It is apparent that in effecting these statutory changes, the legislature intended to cure the defect or mischief that existed in the prior statute that permitted exorbitant recovery in cases in which there were no actual unpaid wages and where the employer acted in good faith,” Judge John Baker wrote for the court.

In addition, the appellate panel cited Landgraf v. USI Film Prods., 511 U.S. 244, 270-71 (1994) in finding the statute could be used as a remedy past bad behavior. “Given the remedial nature of the 2015 amendment and the penal nature of the Wage Payment Statute, we can only conclude that the 2015 amendment may be applied retroactively,” Baker wrote.

The Court of Appeals also affirmed the trial court’s ruling that because Brown has no unpaid wages, his claims for costs, fees and liquidated damages under the Wage Payment Statute must fail. Finally, the appellate court concluded the commissions Brown could have received while working for BCforward were not guaranteed and as such do not constitute “wages” as covered by the Wage Payment Statute.

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Marilyn Odendahl covers the Indiana General Assembly as well as law schools and bar associations across the state for the Indiana Lawyer. Prior to joining the Indiana Lawyer, she was a reporter for nearly eight years at The Elkhart Truth, in Elkhart, Ind., where she primarily covered business. She holds degrees from Ball State University and the University of Louisville.